Morning briefing: Euro can tank lower to 1.1300 if it does not hold above support at 1.1400

Vikram Murarka Kshitij Consultancy Services

The Dollar index continues to rise and could move up to 101-101.50 while Euro can tank lower to 1.13 if it does not hold above support at 1.14. EURINR needs to hold above 108 else it can fall to 107.50-107. EURJPY may hold within 183-186 region for now. USDJPY is holding well above 161 and can rise towards 162 soon. USDCNY can test 6.78 before coming off towards 6.76/75 again. Aussie looks bearish to 0.69 while Pound has already plunged to levels below 1.3250 and needs to bounce back to avoid further decline. USDINR may move higher on Dollar strength and Euro weakness. There is crucial support at 94.15 and lower near 94.05 which may hold.

The US Treasury Yields have risen back from their support. A strong follow-through rise from here can take them further higher. The German yields have bounced back well ahead of their support. While this sustains, they can rise more. The 10Yr GoI remains lower and stable. It has room to fall more from here before reversing higher again.

Global equities are showing mixed trends. Dow and DAX remain capped below key resistance zones and are vulnerable to a pullback towards 51000-50000 and 24500-24000 respectively. Nifty needs to sustain above 24000 to resume its upmove towards 24400, failing which it may slip towards 23800-23600. Nikkei remains the strongest among the major indices and could extend gains towards 73500-74000 if it breaks decisively above 73000. Shanghai remains weak in the near term, but while above 4000, the broader outlook stays positive for a rise towards 4150-4200.

Crude prices remain under pressure. Brent trades below $85 and WTI below $80, keeping the bearish outlook intact for a decline towards $75-$70 and $70-$65 respectively. Gold continues to look vulnerable to a fall towards $4100-$4000 before a meaningful reversal is seen. Silver can extend its decline towards $60. Copper is approaching key support near $6.25, which needs to hold to preserve the possibility of a recovery towards $6.50. Natural Gas remains range-bound and is likely to trade within the broader $3.00-$3.50 range for some time.

Visit KSHITIJ official site to download the full analysis

Author

Vikram Murarka

Kshitij Consultancy Services

Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.

GBP/USD declines toward 1.3500 as markets turn risk-averse

GBP/USD comes under bearish pressure and declines toward 1.3500 on Tuesday. The UK ILO Unemployment Rate held steady at 4.9% in the three months to June, against a forecast of 4.8%, while Employment Change arrived at 83K in the same period versus 147K previous. Weak UK labor data, combined with the risk-averse market atmosphere amid a re-escalation of tensions in the Middle East weigh on the pair.

EUR/USD retreats below 1.1600 on modest USD recovery

EUR/USD struggles to gain traction and trades below 1.1600 in the second half of the day on Tuesday, even after the data from the Eurozone and Germany highlighted improving economic sentiment in August. The US Dollar (USD) benefits from the risk-averse market atmosphere as tensions in Middle East remain high, making it difficult for the pair to turn north.

Gold sticks to losses below $4,400 as USD recovers further from two-month low

Gold remains depressed below the $4,400 mark through the first half of the European session, snapping a two-day winning streak amid a broadly firmer US Dollar. Inflation risks stemming from higher oil prices back the case for at least one interest rate hike by the US Federal Reserve in 2026.

Pi Network holds steady amid app studio costs surge to push user adoption

Pi Network extends a consolidation range capped below $0.0900 holding above the $0.0839 support level. PI token remains under pressure as the Core Team pushes for real user adoption by raising costs for AI-powered app creation, effective from August 24. Leverage-linked risk exposure eases as Open Interest declines despite an increase in social interest.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.